FEMA Starts Revising Flood Premiums

It took months of wrangling for Congress to pass legislation reversing or moderating the unexpectedly steep rises in flood insurance premiums that resulted from 2012 legislation reforming the National Flood Insurance Program (NFIP). But once Congress acted, Senators quickly became impatient with the pace of the law's implementation. In April, Louisiana Senators Mary Landrieu and David Vitter publicly urged the agency to get cracking, reported the New Orleans Times-Picayune (see: "Sens. Landrieu and Vitter push FEMA to speed implementation of new flood insurance law," by Bruce Alpert).

"Are you kidding us?" said Senator Vitter. "It's been nearly a month since we've passed the law and FEMA has done virtually nothing to protect flood insurance policy holders. FEMA needs to take action immediately, because if policies lapse, people could literally lose their homes -- a risk that new rates would protect against."

By April 15, the agency was responding. "FEMA announced Tuesday that, effective May 1, people who purchased new homes after Biggert-Waters became law on July 6, 2012, or who didn't have insurance before that date, or whose insurance lapsed, will revert back to premium schedules in effect Oct. 1, 2013," the Times-Picayune reported (see: "First premium relief from new flood insurance law implemented by FEMA," by Bruce Alpert).

But the agency has more work to do before Congress will be satisfied. "FEMA still has to determine how to alter future rates for people who are scheduled to keep their grandfathered status for subsidized rates as result of the new flood insurance law," the Times-Picayune reported. "The grandfathering provision was cancelled by Biggert-Waters for people whose homes were consider higher risk by new FEMA flood maps, but restored by the new legislation … FEMA said it also still has to work out a process to refund higher premiums for people who bought homes, or whose policies lapsed, and who already have been paying the unsubsidized rates."